Poverty rate in Peru increased in 2017

More than 6.9 million people in Peru live in poverty

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Yesterday INEI, the Peruvian Institute of Statistics, published the results of the “Encuesta Nacional de Hogares” (National Household Study - Enaho); and the results are shocking. For the first time in over a decade poverty in Peru is on the increase again.

According to INEI the poverty rate in Peru went up 1 percentage point from 20.7% in 2016 to 21.7% in 2017; that’s more than 6.9 million Peruvians living in poverty. The rate for extreme poverty remained with 3.8% the same compared to the previous year.

Considered “poor” is a person in Peru that has less than S/ 338 per month (a little over US$ 100) to spend; an amount that covers the expense for the statistical food and non-food basket. “Extreme poor” is a person that has less than S/ 183 per month (about US$ 55) and therefore isn’t able to cover the costs of the minimal food basket.

Poverty in Peru varies heavily with the geographic location: While the overall poverty rate in Peru is 21.7%, in urban areas 15.1% of the population is considered poor, up 1.2% compared to 2016. And here again we have differences: in urban coastal regions the poverty rate is 15.0%, in the urban highlands 16.3% and in the urban jungle areas 20.5%. In Lima 13.3% are considered poor; up 2.3% compared to 2016.

In rural areas of Peru the situation is much worse; here 44.4% of the population is considered poor; up 0.6% compared to 2016. While in the rural coastal regions the poverty rate is with 24.6% near the national average, in the rural highlands 48.7% and in the rural jungle areas 41.4% are considered poor.

The extreme poverty rate in Peru is at 3.8%. While in urban areas only 1.2% are considered extremely poor, in rural areas the number increases to 12.8%. The extreme poverty rate for Lima is 0.7%.

Some analysts attribute the increase of the poverty rate to a weakening of the Peruvian economy. In 2017 Peru’s GDP only grew 2.5%, one of the lowest rates in over a decade. However, in 2009 and 2014 growth rates were worse and still poverty could be reduced. So, others are convinced that with poverty rates in some regions on low levels, it is difficult to reduce them even more, but added that real social policies have to be implemented to fight poverty especially in the rural regions of Peru.

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